pension query: leaving my current employement, new employer does not have a scheme

[jph]

Can anyone advise me on this query please?

I am leaving my current employement in four weeks time to go to a new job. The new company does not offer a private pension scheme - what do I do with the pension fund with my current company - does that get 'frozen' until I retire or can I contribute to it personally?

Should I make provision elsewhere? I am 47 and hope to retire at 60.

thanks

 

[LDFerguson]

You can't continue to contribute to your present employer's pension scheme after you've left. For the purposes of this reply, I'm assuming that the scheme is a Defined Contribution scheme as you refer to a "fund". You can either leave the money in their scheme until you retire, or transfer it into a Buy Out Bond (a lump sum pension policy) of your own choosing. With either option, the accumulated fund will continue to be invested.

Everybody's circumstances are different, but in general the tax reliefs available on contributions to a pension as well as the tax-exempt nature of pension funds make them very tax-efficient forms of saving so you probably should continue to make pension contributions yourself, if your employer doesn't offer a pension scheme.

Your new employer is obliged to offer you access to a PRSA, by the way, although they're not obliged to make any contributions to it for you.

Liam D Ferguson
www.ferga.com